Del Oro Strawberry/DRAFT AL/FLC/JPT/MXK/AJT/Jlj

Resolution W-4617October 5, 2006

Del Oro Strawberry/DRAFT AL/FLC/JPT/MXK/AJT/jlj

WATER/FLC/JPT/MXK/AJT/jlj

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

WATER DIVISIONRESOLUTION NO. W-4617

October 5, 2006

RESOLUTION

(RES. W-4617), DEL ORO WATER COMPANY – STRAWBERRY DISTRICT (STRAWBERRY). ORDER AUTHORIZING AN INTERIM GENERAL RATE INCREASE SUBJECT TO REFUND, PRODUCING AN INCREASE OF $40,000 OR 27.7% RELATIVE TO 2004 GROSS REVENUES.

Summary

By Draft Advice Letter filed on June 20, 2006, Del Oro Water Company – Strawberry District (Strawberry)requested an increase of $111,765 or 76.74% in annual gross revenue for test year 2006. To provide Strawberry with sufficient income to pay operating expenses pending the processing of the utility’s general rate case (GRC), this resolution grants Strawberry an interim general rate increase of $40,000 or 27.7% relative to 2004 gross annual revenues. This interim increase is subject to refund or increase pending Commission-approved final GRC rates.

Background

Strawberry is a district of Del Oro Water Company, a Class B water utility, and serves 374active service connections. Strawberry is located approximately 31 miles east of Sonora, Tuolumne County.

Strawberry requested authority under Section VI of General Order 96 and Section 454 of the Public Utilities Code to increase rates for water service to produce additional revenues of $111,765 or 76.74% in test year 2006. Strawberry’s request shows 2005 gross revenues of $145,637 at present rates increasing to $257,402 at proposed rates in 2006 to produce a rate of return of 12%.

The present rates were established on April 22, 1999 per Res. W-4144, which authorized a rate increase of $25,170, or 24.40%.

Notice

A notice of the full increase request of $111,765 or 76.74% was mailed to customers on September 5, 2006. The notice also indicated that due to the current negative cash flow condition in the Strawberry District, the Commission may authorize a 27.7% interim increase in rates which may be subject to refund or adjustment upon completion of the general rate case.

protests

This is an uncontested matter subject to Public Comment exclusion provided in the Public Utilities Code Section 311(g)(3).

DISCUSSION

The Service Guarantee Plan for Small Water Companies (Standard Practice U-9-SM) as augmented by Res. W-4540, dated June 16, 2005, Ordering Paragraph No. 3, allows an interim rate increase for small water companies operating at a loss on a cash-flow basis. The interim rate increase provides the utility with sufficient income to cover its operating expenses. It is subject to refundor increase pending Commission-approved final GRC rates.

Strawberry is currently operating at a loss. The rate increase request was based on financial information for the period from January through December 2004. After an analysis of these records, the Audit and Compliance Branch estimates that Strawberryshould be allowed an interim increase of $40,000 or 27.7% relative to 2004 gross revenues in order for the utility to meet its cash-flow requirements.

The interim tariff Schedules Nos. ST-1, Metered Service, and ST-2, Flat Rate Service, show the recommended rates.

The Water Division recommends that the proposed interim rates shown below be granted to Strawberry:

Schedule No. ST-1 – Metered Service (Per Month)

Interim

Present Proposed

Quantity Rates:Rates Rates Surcharge

All water, per 100 cubic feet$ 1.07$ 1.37

Service Charge (Per Meter Per Year):

For 5/8 x 3/4-inch meter$ 26.90$ 34.35$ 8.80

For 3/4-inch meter$ 40.25$ 51.40$ 13.20

For 1-inch meter$ 67.00$ 85.56$ 22.00

For 1-1/2-inch meter$135.25$172.71$ 44.00

For 2-inch meter$213.83$273.06$ 70.25

For 3-inch meter$400.50$511.43$132.00

For 4-inch meter$667.75$852.72$220.00

Schedule No. ST-2 - Flat RateService (Per Service Per Month)

Interim

PresentProposed

Rates RatesSurcharge

For each single-family residential unit

or business establishment$29.92$38.21$8.80

For each additional residential unit or

business establishment on the same

premises and servedfrom the same

service connection$25.92$33.10$6.65

Main Resort, for each cabin$10.50$13.41$2.60

For each swimming pool$10.50$13.41$2.60

compliance

Strawberry has no outstanding Commission compliance orders. The utility has been filing annual reports as required.

COMMENTS

This resolution is a compliance filing authorized by Res. W-4540, Ordering Paragraph 3, that pertains to an interim rate increase subject to refund. Comments were not requested.

FINDINGS

1.The interim rates recommended by the Water Division (Appendices A and AppendixB) are reasonable and should be adopted.

2.The rate increase authorized in this resolution is subject to refund pending the completion of the staff investigation of Strawberry’s general rate increase request.

3.This is an uncontested mater subject to the public notice comment exclusion provided in the PU Code Section (311) (g)(3).

Therefore it is ordered that:

1.Del Oro Water Company’s Strawberry Districtis authorized to file an advice letter incorporating the rates contained in Schedules Nos. ST-1,General Metered Service, and ST-2, Flat Rate Service, attached to this resolution as Appendices A andB, and to concurrently cancel Schedules Nos. ST-1 andST-2. Its filing shall comply with General Order 96-A. The effective date of the revised rate schedules shall not be earlier than five days after the date of its filing.

2.The rate increase authorized in this resolution is subject to refund or increase pending Commission-approved final general rate case rates.

3.This resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed, and adopted at a conference of the Public Utilities Commission of the State of California held on October 5, 2006; the following Commissioners voting favorably thereon:

/s/ STEVE LARSON

STEVE LARSON

Executive Director

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

DIAN M. GRUENEICH

JOHN A. BOHN

RACHELLE B. CHONG

Commissioners

Resolution W-4617October 5, 2006

Del Oro Strawberry/DRAFT AL/FLC/JPT/MXK/AJT/jlj

APPENDIXA

Page 1

Schedule No. ST-1

METERED SERVICE

APPLICABILITY

Applicable to all metered water service furnished on amonthly basis. (T)

TERRITORY

Strawberry and vicinity, located approximately 31 miles east of Sonora, (T) Tuolumne County. (T)

RATES

Quantity Rates:

All water, per 100 cubic feet $1.37(I)

Service Charge:Per Meter

Per MonthSurcharge

For 5/8 x 3/4-inch meter$ 34.35(I)$ 8.80

For 3/4-inch meter$ 51.40(I)$13.20

For 1-inch meter$ 85.56(I)$22.00

For 1-1/2-inch meter$ 172.71(I)$44.00

For 2-inch meter$ 273.06(I)$70.25

For 3-inch meter$ 511.43(I)$132.00

For 4-inch meter$ 852.72(I)$220.00

The Service Charge is a readiness-to-serve charge which is applicable to all metered service and to which is to be addedthe charge for water used computed at the Quantity Rate.

The Surcharge is in addition to the regular metered water bill. The surcharge must be identified on each bill. The surcharge is specifically for the repayment of the California Safe Drinking Water Bond Act loan authorized by Decision 83-05-052.

APPENDIX A

Page 2

Schedule No. ST-1

(continued)

METERED SERVICE

SPECIAL CONDITIONS

1.If the customers are charged annually, the annual service charge applies to service during the 12-month period commencing January 1 and is due in advance. If a permanent resident of the area has been a customer of the utility for at least 12 months, he or she may elect, at the beginning of the utility calendar, to pay prorated service charges in advance at intervals of less than one year (monthly, bimonthly, or quarterly) in accordance with the utility’s established billing periods. Meters will be read and quantity charges billed monthly, bimonthly, or quarterly in accordance with the utility’s established billing periods except that meters may be read and quantity charges billed during the winter season at intervals greater than three months

2.The opening bill for metered service, except upon conversion from flat rate service, shall be the established annual service charge for the service. Where initial service is established after the first year, the portion of such annual charge applicable to the current year shall be determined by multiplying the annual charge by one three-hundred-sixty-fifth (1/365) of the number of days remaining in the calendar year. The balance of the payment of the initial annual charges shall be created against the charges of the succeeding annual period. If service is not continued for at least one year after the date of initial service, no refund of the initial annual charges shall be due to the customer.

3.All water bills are subject to PUC Reimbursement Fee set forth in Schedule No. UF.

APPENDIX B

Page 1

Schedule No. ST-2

FLAT RATE SERVICE

APPLICABILITY

Applicable to all flat rate services furnished on amonthly basis.(T)

TERRITORY

Strawberry and vicinity, located approximately 31 miles east of Sonora, (T) Tuolumne County. (T)

RATES

Per Service

Connection

Per MonthSurcharge

For each single-family

residential unit or business establishment$38.21(I)$8.80

For each additional residential unit or business

establishment on the same premises and served

from the same service connection$33.10(I)$6.65

Main Resort, for each cabin$13.41(I)$2.60

For each swimming pool$13.41(I)$2.60